Boeing Workers Reject Concessions and Defend Rights
Boeing workers in Seattle, Washington recently rejected efforts by this giant monopoly to force open their contract and secure big concessions. The workers took their stand to defend their rights and union, with a large turnout for the vote and 67 percent saying NO! to concessions.
Boeing used the threat of moving jobs for its new line of wide-body passenger jets, the 777X. With this threat they secured $8.6 billion over 16 years in handouts from Washington State. The Governor called the legislature into special session to secure these billions for Boeing — the largest state-level pay the rich scheme in U.S. history.
Boeing demanded big concessions from the workers, again using their threat to move the jobs to a different location and offering a $10,000 signing bonus. The concessions included major cuts to wages for new workers, healthcare and all pensions, especially those for younger workers and new hires. The contract had no language guaranteeing jobs would remain in Seattle even with the concessions. Boeing also demanded language that would allow them to freeze pensions in 2016 and then sell them as an annuity, meaning workers would have no control over them and may never collect on them. Medical costs for workers would double and medical benefits for retirees would be eliminated. Boeing also demanded language allowing them to open the healthcare package and unilaterally reduce it without any negotiations. All of these concessions in the context of attacking the union by demanding that a contract that is not up until 2016 be opened now. And that the new contract be extended until 2024.
The 31,000 workers involved are members of International Association of Machinists (IAM) District Lodge 751. They were not even informed that international union representatives were negotiating to re-open the contract and pressuring local leaders to do the same. The majority of local leadership twice voted against submitting Boeings’ demands to the workers but they were overruled by the international. While secret negotiations had taken place for two months, workers were presented with the package and told to vote on it within one week — despite this surprise re-opening of the contract and many questions remaining unanswered.
Workers were not intimidated by this situation and immediately took initiative to develop their own webpage and distribute leaflets calling on the membership to vote NO! They also organized a rally and made sure there was a large turn out for the vote.
The materials outlined the content of the concessions Boeing demanded and urged all to stand up for their rights and the rights of the next generation. They emphasized the fighting tradition of the machinists and the need to defend their wages and working conditions, for themselves and future generations. As one leaflet put it: “How do you leave less for your kids or the next generation of workers?” It underlined that Boeing was demanding a contract that denied the next generation a guaranteed pension and ensured new hires had no pension security; condemned future hires to endless progression of 20-years minimum (progression refers to the incremental increases in wages bringing new workers to top wage levels); made hire-in wage rates so low that lower pay grades will be at minimum wage in the future. The wage rates would mean only one increase in starting rates for 32 years (1992-2024).
Under the current step system for wages, in a typical pay grade, Grade 4, minimum starting pay is $15, maximum is $35.25. Workers get raises of 50 cents an hour for the first six years, then a big jump to top pay. Under the proposed system, new-hires would never get the big jump, so they would be forced to accept much lower wages over a much longer period. The proposed contract also meant that the starting rate of $15 — considered the needed minimum wage now — would remain the same through 2024.
Workers also emphasized that the new wage and pension structure was designed to divide the workers, with those doing the same work getting paid far different amounts and those retiring also facing far different pension benefits. The stand taken to reject the concessions was one that instead said NO! to divide and conquer and yes to rights!
Workers also rejected the demand that the re-opening of their contract become the new “normal.” Two years ago Boeing threatened to move future production of the 737 planes. The union accepted opening the contract to extend it to 2016. Now Boeing is again demanded that it be opened for more concessions and extended to 2024.
As is common with the monopolies, even with concessions, Boeing moved some production for the 737 to Japan and to a new plant in South Carolina, a “right to be a slave” labor state. Wages there are $15 per hour, less than half of what most Seattle workers have achieved.
The materials by the workers brought to the fore that Boeing is making record profits and has record backlogs of orders for its planes. It is getting record billions in hand-outs from the state government — which, since they were passed as law Boeing will likely keep even if 777X production is done elsewhere. They firmly rejected the notion that concessions are solutions and that workers are to sacrifice more and more for the rich. Their organizing as a collective to defend their rights and stand firm for the next generation are actions being supported not only in Seattle but by Boeing and other workers across the country.
Below is the content from leaflets produced by Boeing workers and widely distributed as part of organizing a No! vote against concessions demanded by Boeing. Headlines from other leaflets read: How do you leave less for your kids or the next generation of workers? And Danger: Healthcare at Risk but no one is talking about it, referring to Boeing plans to unilaterally change healthcare benefits. The leaflet concluded: Vote NO so we control our healthcare going forward. Other content included: Trade all of our jobs and our union’s power for 777X? Vote No to Corporate Blackmail! Another said, The one thing Boeing can’t take away in a proposal is our Solidarity. Don’t let Boeing destroy our union —VOTE NO! Below is content on pensions from one leaflet and that on the concessions demanded from another.
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General Pension Background
What is the value of a pension?
You have the benefit of guaranteed retirement income that lasts your lifetime. Like Social Security, it is a monthly check to supplement 401(k) savings. Employees like that the pension provides a fundamental, stable amount of retirement income that is not subject to stock-market fluctuations.
Who gets a pension?
Right now all current members and future hires earn benefits from the BCERP pension plan. Going forward, current members accumulate additional benefits thru 2016. Then it is frozen and if you are not collecting your pension by then, it is at risk. Once frozen, Boeing can terminate the plan and sell the assets as an annuity, removing them of all obligations. Also once frozen, they can merge it with other Boeing plans. Currently, our pension is well funded; however, the executive supplemental plan is underfunded. If we freeze our pension, Boeing can use the assets to fund the executive supplemental plan going forward. JUST Say NO!
How much is the current pension worth?
The value of a pension builds over time. The longer-you work, the more your monthly check will add up. The benefit is an incentive to build your career at Boeing, rather than go to work at another company.
Why does Boeing want to take it away?
Boeing takes the excess funding from our plan to give it the executive supplemental plan (which is underfunded). The company eliminated the pension for new hires in non-union jobs and strong-armed other unions in negotiations to eliminate pension for new hires. This proposal goes way beyond that and eliminates it for all future hires and freezes it for us. If we vote this in, it will open the floodgates for Boeing to do this to all other payrolls at Boeing. Do we want to be the ones that lead the way to the destruction of pensions for all Boeing employees? If Boeing does this while making record profits, other companies will follow and it will be end of pensions for all workers nationwide. Let’s not be the leaders of this attack on workers. VOTE NO!
What about the new Boeing retirement plan?
The new proposed retirement savings has no details. What access will you have to it? What are the investment options and fees charged? No one knows. VOTE NO!
Defined Contribution (Boeing’s proposed savings plan)
The amount contributed to your retirement is defined by a formula and deposited into an account Accounts are immediately 100% vested. Individuals (each of us) bear the investment risk. While protected by the SIPC against fraud, accounts are not protected from investment losses.
Defined Pension Benefit (what we have today)
The actual benefit you receive in retirement is defined by a formula. The company bears the investment risks and retirement benefits are guaranteed by the PBGC. The benefit lasts for your lifetime (can any of us predict how long we will live?)
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Takeaways Too Great! No true job guarantees. VOTE NO!
Takeaways go on and on…
• Work placement on current jobs in LOU 42 (737MAX, P8, tanker existing wide bodies and supplier warranty work) expires in 2016 if this is approved. WHY???
• Pension frozen in 2016 (then our pension will fund the supplemental executive plan). Once frozen it can also be terminated and sold as an annuity and you may NEVER COLLECT your benefits.
• New pension savings plan has the same volatility as the VIP - you take on the risks. The new proposed retirement savings plan has no details…What access will you have to it? What are the investment options and fees charged? No one knows...VOTE NO!
• Medical costs will more than double from where they are today (and wage growth slows even more). All medical plans at 90 percent, any major medical (hospitalization) will cost you thousands each year and each time.
• Another tragic consequence: Agreeing to this allows Boeing to reduce benefits without negotiations in the future. This is designed to keep Boeing from paying a potential excise tax under the Affordable Care Act. It is currently illegal under ACA to pass that tax from the employer to worker so this would give Boeing the ability to lower our benefits without negotiations to keep them from paying the excise tax.
• Hire in rates will remain the same through 2024 (only one increase since 1992 — that will be 32 years). Since our state’s minimum wage has a COLA escalation the lower labor grades hire in rates will be passed up by the state minimum wage.
• Retiree medical could be eliminated based on Boeing’s language once the pension plan is frozen (eligibility requires that you receive a benefit from BCERP).
• Slowed income growth. While Boeing has profits soaring in the billions, your wage growth will slow to 1% in years 2016, 2018, 2020 and 2023. At the same time your wage growth stagnates, you will be asked to increase your out-of-pocket monthly premiums 10% each year.
• Condemning future hires to endless progression (50 cent yearly wage increases). If ratified, new hires will be in progression for most of their career (minimum of 20 years) and may never reach maximum pay before retirement.
Too Many Takeaways and No Answers = VOTE NO
Detroit Workers Continue to Oppose
Workers in Detroit continue their resistance to attacks on their rights by the state and federal government. There have been numerous demonstrations opposing the dictate of the city’s Emergency Manager, Kevyn Orr. He is a bankruptcy lawyer, whose firm, Jones Day, is now one of the “advisors” for Detroit’s bankruptcy proceedings. Orr was appointed in March by the Governor and given sweeping powers over elected city governance to eliminate contracts and sell public assets.
Demonstrations, forums, petitions and more have repeatedly given expression to the stand of the public against the emergency manager law — imposed even after the people of Michigan voted No! in a statewide referendum. The entirely anti-people and anti-democratic character of the law can be seen in the fact that faced with the No! vote, the state legislature, pushed by the Governor, simply passed an almost identical law and did so in a manner that it could not be challenged with a referendum.
In Detroit, contrary to votes by City Council and the stands repeatedly expressed by the public, in July Orr demanded that Detroit file for bankruptcy. Since that time numerous actions have also occurred. These include a demonstration of more than 1,000 defiant protesters at the federal courthouse October 23 as the Chapter 9 municipal bankruptcy eligibility trial began in U.S. Bankruptcy Court. Residents, workers, retirees, students, youth, faith people and activists came out to again say No! to the city bankruptcy, No! to the emergency manager imposed on the city.
Hands Off Our Pensions! Make the Banks Pay! and Whose City? Our City! were among the chants echoing off the building as the protest took the entire street in front of the courthouse. Many were union members from the American Federation of State, County and Municipal Employees (AFSCME), which includes many Detroit retirees. The United Auto Workers also had a sizeable presence as did union firefighters, International Brotherhood of Electrical Workers, the Detroit Federation of Teachers, UNITE HERE and postal workers.
Additional demonstrations took place at Bank of America in November, opposing yet another pay-the-rich scheme. Emergency Manager Orr and Governor Snyder negotiated a deal with Wall Street financiers that would increase Detroit’s debt by $350 million by paying $250 million to Bank of America (a client of Orr’s law firm Jones Day) and UBS (United Bank of Switzerland). Barclays, the new lender, would then have a super-priority lien on Detroit’s assets and income tax revenue.
Under this swindle, 20 percent of Detroit’s income tax revenues, $48 million per year for six years, will be pledged to these monopolies even after the bankruptcy is completed. This scam is supposed to pay off the risky interest rate “swaps” Wall Street financiers imposed on Detroit, where they also made big scores off the backs of the workers. And while financiers get hundreds of millions, workers’ pensions are subject to being reduced to 16 cents on the dollar.
Bank of America and UBS are two of the main predatory mortgage lenders who destroyed Detroit neighborhoods with massive home foreclosures, and whose executives have been jailed (UBS) and indicted (Bank of America) for their municipal bond crimes. Detroit’s debt payments increased dramatically as direct result of these large, complex and risky financings imposed by Wall Street. These financiers, having already been paid $300 million in fees to terminate interest rate swaps, are now poised to collect another $300 million simply to terminate yet more risky swaps that were embedded in bond deals. It is a pay-the-rich-double scheme, all while it is said that $198 million could prevent bankruptcy.
The financiers are demanding that they get paid outside of the bankruptcy, before other creditors and before retirees. Overall these toxic deals with the financiers since 2008 have meant more than $1 billion in Detroit’s public funds have been handed over to the rich.
While Detroit’s City Council unanimously voted down this latest deal and the public has repeatedly expressed it -opposition, Snyder and Orr are dictating that it go through. They have filed a motion to have it approved by Bankruptcy Judge Steven Rhodes, who already ruled December 3 that pensions could be cut. Rhodes has set a hearing for December 10 when more actions are also planned. Another demonstration for December 17 at the federal courthouse is also being organized. Among the demands are: Cancel Detroit’s Debt! Hands Off Our Pensions – No! to 16 cents on the dollar! Save City Services and Assets.
Detroit workers have repeatedly stood to say they have not created this crisis and they reject the completely undemocratic dictate imposed on them by the Emergency Manager. The large majority of public workers already only have poverty-level pensions of about $19,000. They are demanding that their rights be respected and continue to organize despite the repeated attacks by the state, which is serving only the private interests of the monopolies against the public interest.